Like other wealth management technology vendors, Salesforce is betting the Department of Labor’s fiduciary rule will push financial advisors toward adopting its product.
The CRM giant announced it is integrating Shield, its suite of compliance services, with Financial Services Cloud to help comply with existing and new industry regulations. With the help of a legal team from Deloitte, Shield will be specifically geared toward helping advisors adapt to the DOL’s fiduciary standard.
Salesforce launched Financial Services Cloud in March with the intention of it becoming the primary dashboard for financial advisors, and the new focus on DOL compliance is meant to emphasize this. Providing built-in archiving and reporting eliminates one more feature an advisor needs to pay another third party for.
“The way we kind of look at it is at the end of the day everything goes around the relationship manager,” said Rohit Mahna, the general manager of the financial services team at Salesforce, adding that knowing past conversations, a client’s goals and how a client likes to invest is more important than knowing what products to sell. “People don’t care about product. The investment side is getting more and more commoditized. There’s other competitors coming into this space, like what a robo is doing, and there’s going to be the next robo, I’m sure, in a couple years that we aren’t even aware of.
“So the way you really differentiate is go back to what the business is about, which is true relationship management.”
Mahna said that as his team dug through the DOL’s new rule, they realized that assisting advisors to act in a client’s best interest was tied into Salesforce’s goal of helping them be a part of clients’ everyday lives. Client relationship doesn’t just help sell products, according to Mahna, it ensures advisors are selling the right products.
“From the DOL side, that’s a core component. If you’re looking to get a [Best Interest Contract] exemption, if you’re looking to send out a fee disclosure document, it has to tie back to what the goal need of your end client is,” Mahna said.
Shield expands the CRM’s history retention capabilities to track data for up to 10 years (the fiduciary rule requires six years of retention), including client profiles, household information and communications. Shield also includes event monitoring so compliance experts see what sort of data different employees are accessing, and allows for data encryption.
Because it's integrated with the central Salesforce platform, Shield will be able to track anything that a firm employee does in Financial Services Cloud, retain the information for years and run reports on it. Mahna said it could all be configured easily by a home office team or with “clicks, not code.”
Salesforce certainly isn’t unique in adding DOL compliance tools to its product. With the April deadline to comply looming, Joel Bruckenstein, the producer of the T3 conferences, said there’s “tremendous” incentive for the tech industry to build DOL compliance tools, and that every tech company says it’s working on something.
Some smaller, wealth management-specific CRM companies like Redtail, Junxure, Grendel and Wealthbox say their products are already built with fiduciary compliance in mind.
Salesforce’s size and involvement in so many different industries may make it more difficult for the company to adapt its products, but Mahna said Salesforce has the resources and existing relationships with major firms to build the features that financial services professionals of all kinds need, as banks and insurance as well as wealth management firms are all pivoting towards the advice business model.
“To move to become an advice-based business, firms know there’s multiple disciplines,” Mahna said. “Not just a CRM tool or a financial planning tool—you need a lot, but you need it all connected so everything speaks to each other.”
